May 7 (Bloomberg) -- South Korea’s won may be poised to
decline 5.6 percent against the dollar to the lowest level since
September, said Mitsubishi UFJ Securities Co., citing a “golden
cross” formation on the chart.

The U.S. currency’s 10-day moving average versus the won, a
level of resistance, crossed above the 20-day line this week to
form a golden cross, which appears when short-term averages pass
above longer-term ones. The indicator signals the won may weaken
to 1,216.20 per dollar in a month, said Minoru Shioiri, chief
manager of foreign-exchange trading at Mitsubishi UFJ in Tokyo.

Korea’s currency reached 1,102.85 on April 26, its highest
level since September 2008, and has since dropped 3.8 percent to
trade at 1,148.6 as of 1:36 p.m. in Seoul today, according to
data compiled by Bloomberg.

“The won’s recent appreciation trend seems to have turned
around at this moment,” Shioiri said. “The currency may stay
under pressure for some time from here,” especially as it
declined beyond the 50 day-moving average, another bearish
signal, he said.

The currency has weakened beyond previous resistance levels
where the Korean won’s gains stalled in December, November and
October, suggesting it may drop further to 1,216.20, which was
the high for the currency on Aug. 4, Shioiri said. Resistance is
where orders to sell a currency may be clustered.

In technical analysis, investors and analysts study charts
of trading patterns and prices to forecast changes in a security,
commodity, currency or index.